Student activities fee determination needs work

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Much like how voters rarely glance below the top tickets on the ballot, students often don’t take time to glance below the tuition, housing, and meal costs on their Carnegie Mellon bill. If they did, they would notice the largest fee that they have to pay to attend Carnegie Mellon is the activities fee, at a cool $129/semester for undergraduates and $107 for graduates this academic year.

As its name suggests, this is the fee that funds most of the student organizations on campus. However, for such a significant fee, it is determined based on an outdated model, which itself is largely arbitrary.

Since at least the 2014-15 academic year, when the undergraduate activities fee was $123 and the graduate fee $101, the fee has changed by $2 for both groups every single year. There is no science behind this, no rationale, only a self-perpetuating cycle of constant $2 increases.

Next year’s fee of $131 for undergraduates and $108 for graduates seems like it has some science behind it, indexed as it is to the Consumer Price Index (CPI), a measure of inflation meant to measure changes in standard of living. However, students’ travel and pizza costs—the primary uses for the activities fee funds—are barely measured by the CPI. As a result, while this inflation measure might work well for economists, it is useless for our purposes.

The lack of thought that has historically gone into determining the fee each year is not only remarkable—over $2 million are on the line annually—it is also detrimental for students’ experiences at Carnegie Mellon.

This is because the university is consistently failing to meet students’ financial demands for their extracurricular activities. Between the 2009-10 and 2014-15 years, the amount of funds requested from the Joint Funding Committee (JFC), the group of students charged with allocating the activities fee to each student organization on campus, increased 36.26 percent. Over these same five years, the amount the JFC recommended increased by a roughly commensurate 36.06 percent.

However, between 2014-15 and 2017-18, the requested amount increased by a further 35.97 percent, but the recommended amount only increased 17.86 percent. While students are requesting 7.98 percent more money each year, the JFC is only recommending 4.19 percent more. This has caused the gap between the requested and recommended amounts to go from less than $600,000 in 2014-15 to over $1 million this year.

Clearly then, demand for the students’ activities funds has been rising, but supply has not. The increase in demand is likely due to the greater number of student organizations on campus (255 organizations applied for JFC funding for this academic year as opposed to the 221 applying for 2014-15) and that each organization is attending or hosting more events and thus spending more money.

The solution to this underfunding problem starts with amending the way the student activities fee is determined. Instead of deciding upon an arbitrary increase, the Student Body Vice President of Finance (SBVPF) should study the changes in the costs Carnegie Mellon organizations incur.

One way to do this would be by looking at line items an organization has had for the past three years and tracking the change in costs for those line items. Taking a random sample of such line items across all organizations would create a measure which the activities fee increase could be indexed to. This would thus more accurately reflect increases in student organizations’ costs than a frivolous $2 increase.

A cruder but easier-to-implement method would first take the average annual percentage increase in the requested amount of funds between the last four years, weighted to emphasize increases in the most recent years. Then, the resulting percentage is the proportional increase we want to see in the JFC’s recommended amount that year. It is straightforward to back-calculate the activities fee from that figure.

These empirical approaches would likely lead to a higher activities fee if implemented without other changes, at least in the short term while Carnegie Mellon continues adding more organizations and existing organizations discover new outlets that require funding.

Since these causes are likely temporary, they can be resolved by tapping into JFC’s reserves. The reserves exist precisely for this kind of ephemeral rise in demand and should be used to ensure that student organizations get the money they need at low cost to the overall student body. Furthermore, organizations usually tend to spend less than their entire budget each year, which means that even after drawing from the reserves, we will not deplete it significantly for future years.

Second, the university needs to better support student organizations looking for outside sponsorships. While the university has great relationships with corporations, institutions, and alumni that it leverages when it comes to funding new buildings or research, the university should better extend those relationships to help students secure funding for their organizations.

Many students either don’t know that such sponsorships are feasible options or lack the contacts to make them happen. The university can improve this state of affairs by better communicating how organizations can acquire outside funding, provide more extensive training on how to do so at events like the Tartan Leader Conference, and be willing to use their relevant contacts for organizations’ benefit rather than just for the administration’s initiatives.

If more organizations can secure outside funding, it will reduce the pressure on student activities fees to cover all the costs while teaching students practical skills on marketing an idea and making deals in their efforts to get sponsors. Thus, we can progress toward achieving two of the university’s goals: a better experience for students and one that is at the same time financially accessible to all.

While the administration executes this plan, students need to rely on one another to identify ways to cut costs. After reviewing hundreds of organizations’ applications, the JFC will surely find, as I have, that some organizations spend far less on the very same events or similar line items that other organizations end up spending more on.

The JFC and mid-year funding sources, then, should identify organizations that spend an unusually low amount per person on certain costs, ask them how they managed to cut costs and spread that knowledge to other organizations so they, too, can take advantage of the cost-saving methods employed by the first organization. This will allow student organizations to do everything they want to, just at a lower cost, again saving money that can be used for other activities.

Lastly, the ratio between the activities fee charged to undergraduates and graduates is also whimsical. The lower fees the graduate students pay is compounded by the fact that 70 percent of their fees go directly to the Graduate Student Assembly while only 10 percent of the undergraduates’ fees go to the Undergraduate Student Senate. The remainder of both go to the JFC.

Such a distribution makes sense if 76.4 percent of the funds that JFC allocates goes to undergraduates and the remainder to graduate students. If the proportion is more, then graduate students are relatively over-paying while if it is less, undergraduates are funding graduates’ activities.

To resolve this potential discrepancy, the SBVPF could track the ratio of undergraduates to graduates in each organization, then use that to estimate how much money was given to undergraduate students and how much to graduate students. He or she can then prepare a proposal for the activities fee that splits the costs between the two fairly. Note that this will not affect how much funding any organization receives—only the split between how much undergraduate and graduate students pay as part of the activities fee.

Logistically, this can be done by asking each organization how many of its members are undergraduates and how many are graduates and basing the estimates on those numbers. However, it might be difficult to parse out the benefit an organization provides from the composition of its members. For example, even if AB Films mostly has undergraduates, graduate students certainly benefit from the movies it plays.

An alternative method would then be for the Undergraduate Student Senate, Graduate Student Assembly, and SBVPF to devise a ratio that they think accurately represents the breakdown in spending between undergraduates and graduates. This ratio can then be used to identify what the ratio between the two’s activities fee should be. The Student Government bylaws imply that this ratio should be based on 70 percent of the activities fee being spent on undergraduates and 30 percent on graduates. But this figure can be easily amended if the student government finds it necessary, such as to the current rate of 76.4 percent.

The student activities fee and university support for external funding have not kept pace with the rising demand to use those funds from student organizations. If we are serious about improving everyone’s experience at Carnegie Mellon at an affordable price, we must reform how we determine the activities fee, use the JFC reserve for the next few years, encourage and help student leaders gain outside scholarships and grants for their organizations, and implement a system whereby organizations can share with each other how to cut their costs.

These changes will make disbursement of the activities fee fairer and more effective for everyone. Students’ involvement in extracurriculars has always been a source of pride for Carnegie Mellon. It’s time we worked to financially support the unprecedented demand for extracurricular involvement we are now seeing.